Congress should expand, not kill, tax credit for historic
preservation

Renovation of Buffalo's historic buildings is booming, thanks in
large part to the federal historic tax credit program. However, this
type of investment and economic stimulus could grind to a halt if
opponents of the credits have their way.

As News business reporter Jonathan D. Epstein outlined in his
comprehensive article a week ago, the continuing renovation of our
old buildings is dependent on an incentive that has been targeted
for elimination.

Tax reform efforts have turned a spotlight on government
expenditures. In a budget-balancing proposal that can only be
described as short-sighted, House Ways and Means Committee Chairman
Dave Camp, R-Mich., released a discussion draft in February
containing language that would repeal the federal rehabilitation
credit.

Protection and even enhancement of the federal credit is the
centerpiece of a multiyear effort by the Historic Tax Credit
Coalition in collaboration with the National Trust for Historic
Preservation. The groups are seeking to reintroduce the Creating
American Prosperity through Preservation (CAPP) Act. In New York,
the Preservation League of New York State is leading advocacy for
this legislation.

Developers in New York State have aggressively used the federal
program from the beginning, and since a complementary state credit
has come on line, historic rehabilitation work has extended to all
corners of the state. Proposed enhancements in the CAPP Act will
make the program even more valuable for New York. Projects earning
less than $5 million in federal credits will qualify for a 30
percent credit instead of the current 20 percent. That would apply
to the majority of projects undertaken upstate.

The CAPP Act also proposes to end federal taxation of state
rehabilitation credit use. Currently, developers using the state
rehabilitation credit lose 35 percent of the value of every dollar
utilized in the state program. Eliminating federal taxation of the
state credit will generate greater equity investment on the front
end of projects, when capital is most needed.

These CAPP Act enhancements could assist 36 projects pending or
planned in Buffalo, totaling more than $83 million in projected
capital investments for our city and more than $1 billion in pending
projects statewide.

Sen. Charles E. Schumer, D-N.Y., is a co-sponsor of the CAPP Act,
and Sen. Kirsten E. Gillibrand has shown keen interest. That's
welcome leadership on the Senate side. But the House has yet to
reintroduce the CAPP Act. Many members of the New York State
delegation are interested and likely co-sponsors, including Reps.
Brian Higgins, D-Buffalo, and Louise Slaughter, D-Fairport.

Republicans in Western New York need to lead on this issue as
well.

Reps. Chris Collins, R-Clarence, and Tom Reed, R-Corning, must
persuade House leadership to allow introduction of the CAPP Act and
spearhead an effort to protect this economic development program
from elimination.

House leadership should understand that no matter what happens
with tax reform, the federal rehabilitation tax credit deserves
protection and enhancement. It is well documented that the program
drives reinvestment and is a net income generator for the federal
government. More important, it is a critical component of community
revitalization and should never have been targeted for elimination. …

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